Asset Protection Trusts; Long Term Care- 4 Ways to Pay; Gift Tax Return Needed? Convert S Corp into LLC

Hear Neel Shah, Managing Attorney of the Law Firm of Shah & Associates, P.C. describe the highlights of this weekly Blog Posts. For the full post, visit: https://lawesq.net/blog/

Gift Tax Returns and Penalties for Not Filing
A fair amount of taxpayers are familiar with at least the basics behind gifts and taxes, but it’s important to understand your obligations when making taxable gifts to others to ensure your compliance with the Internal Revenue Code. Click here for more, https://lawesq.net/blog/2015/03/gift-tax-returns-and-penalties-for-not-filing/

Asset Protection Trusts: Guidelines for Efficient Integration
One of the most popular approaches to estate planning has to do with safeguarding assets against possible losses. Asset protection trusts are one common way to protect property for you and your beneficiaries.Asset protection trusts refer to irrevocable trust structures in which a trustee holds property and distributes it out under his or her discretion. Click here for more, https://lawesq.net/blog/2015/03/asset-protection-trusts-guidelines-for-efficient-integration/

Self-Settled Asset Protection Trusts: A Growing Estate Planning Trend?
Self-settled asset protection trusts get more buzz these days, but they weren’t even recognized in the United States until the latter part of the 1990s. Before this time, putting together a self-settled trust required establishment outside U.S. borders. In 1997, though, Alaska recognized self-settled trusts and Delaware followed. Click here for more, https://lawesq.net/blog/2015/03/self-settled-asset-protection-trusts-a-growing-estate-planning-trend/

The Four Ways to Pay For Long Term Care
With increasing longevity and awareness surrounding elder care issues, more people are seeking out options to plan for long-term care. In the event that you or a loved one needs long term care assistance, there are four primary ways for which that case can be paid for. Click here for more, https://lawesq.net/blog/2015/03/the-four-ways-to-pay-for-long-term-care/

Should I Convert My S Corporation to an LLC?
It’s very popular for business owners to operate under the structure of an S corporation. This allows business owners to generally avoid “double taxation” that could impact owners of C corporations. Operating as an S corp may help a business owner avoid self-employment taxes typically affecting LLCs that choose to be taxed as partnerships. Click here for more, https://lawesq.net/blog/2015/03/should-i-conve…tion-to-an-llc/

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Should I Do a Will or a Living Trust? Part Two

If you read yesterday’s post, you’ll know that wills and living trusts each accomplish three goals, but they are not one and the same. Neither document is likely to be a comprehensive solution for all your needs, so you’ll need to consider what time period you are planning for. canstockphoto10979354

If you are looking simply to plan for what happens after you pass away, both a will or a living trust can be a good option. If incapacity, however, is your primary concern, a living trust is far and away the more superior tool. Many people focus on what happens after they pass away when it comes to estate planning, but disability and incapacity are increasingly important concerns regardless of your current health.

Assets inside a living trust will already be under the control of a trustee you named to manage things in the event of your incapacity, this allows for a smooth and quick transition. Rather than having to wait out months in a legal disability proceeding, you’ll have a trustee who is empowered to act right away. There are a few other reasons that a living trust wins out over the will, such as if you have a vacation home or real estate located in another state. This is because you won’t have to worry about the estate being probated separately in each state after you pass away, so long as the property is inside the trust.

As you can see here, neither one of these tool is an all-encompassing solution, so you should talk about your needs with an experienced estate planning attorney. We can help at info@lawesq.net

Should I Do a Will Or Living Trust? Part One

Anytime you hit the Internet to do some kind of research, you’re likely involved in thinking about the situation at hand, how a product or service will fit into your own life, and any unintended consequences that might pop up during the way. Just as choosing a new car or new home involves the careful weighing of options for your unique needs, estate planning involves the selection of tools that are most appropriate for you and your situation. shutterstock_85369789

Each person’s estate planning goals are different, meaning that these goals need separate documents and strategies. Even if the overarching goal is the same- like helping family members to avoid the probate process, life experiences and long term goals will help point you in the right direction regarding the actual tools to use. One of the most common questions that a person new to estate planning has regards whether to use a will or a living trust. In this two-part post, we’ll look at what differentiates these documents from one another to help you identify whether one is a better fit for you than another.

A will accomplishes three primary goals: determining how and to what people your assets are distributed once you pass away, it can allow you to name a guardian for a minor child or disabled adult, and it establishes a personal representative for your affairs.

A living trust also accomplishes three goals: it establishes how your disability is determined and who will handle your affairs in the event you are disabled, it determines how and to what people your assets are distributed after your death, and it names a success trustee to handle your affairs after you pass away.

Tune in to tomorrow’s post to learn more about wills versus living trusts. As always, we’re here to answer questions and walk you through it: info@lawesq.net

Should I Convert My S Corporation to an LLC?

It’s very popular for business owners to operate under the structure of an S corporation. This allows business owners to generally avoid “double taxation” that could impact owners of C corporations. Operating as an S corp may help a business owner avoid self-employment taxes typically affecting LLCs that choose to be taxed as partnerships.

Even though dividends from S corps are not calculated in terms of self-employment taxes and provide more income tax benefits for this reason, they don’t provide the kind of asset protection that a business owner might prefer. shutterstock_232372861

Stock linked to C corps and S corps can be exposed to risk in the form of judgment creditors. If there are major assets inside your S corp, there may be benefits to converting to an LLC to protect them. Whereas an S corp has stockholders, an LLC is limited to members. So long as the LLC documents are drafted in the right way and you have more than one member, a judgment creditor should not be able to access assets inside the company.

If you own an S corporation and are weighing the benefits of converting, communicate with an business protection planning specialist to determine how your state laws view this. In many cases, statutes will allow for this conversion for long that the ownership of the LLC is identical to the previous structure.

Contact our office to learn more about to advantages associated with converting your business type- you can schedule an appointment by emailing info@lawesq.net.

Business Planning/Taxes;Revocable Living Trusts;Dying w/o Will;Elder Law Attorney;Power of Attorney

Hear Neel Shah, Managing Attorney of the Law Firm of Shah & Associates, P.C. describe the highlights of this weekly Blog Posts. For the full post, visit: https://lawesq.net/blog/

Structuring Your Business Succession Plan With Taxes In Mind
If you feel overwhelmed or confused by the process of business succession planning, you’re not alone. In fact, this is a common challenge facing many of America’s business owners. To further complicate matters, many business owners are not informed about the possible tax implications of a succession plan they choose..For More Details https://lawesq.net/blog/2015/03/structuring-your-business-succession-plan-with-taxes-in-mind/

Revocable Living Trusts – What You Must Know
Before determining that a revocable living trust is the right fit for you, you should evaluate several factors. The term “living trust” may be exchanged with “revocable trust”. This means that you create it during your lifetime and that you can change it during your lifetime as well. The living trust, when used properly, can help you manage assets or protect you in the event that you become ill or disabled. For more details https://lawesq.net/blog/2015/03/revocable-living-trusts-what-you-must-know/

What Happens if I Die Without a Will?
If you die without a will, the laws of the state in which you lived will determine what happens to the assets inside your estate. Typically, the distribution will be passed along to your spouse and any children, although this can vary based on your location. One of the downsides of not having a will is that you give up control over what can happen to your estate assets. For More Details https://lawesq.net/blog/2015/03/what-happens-if-i-die-without-a-will-2/

Why Would I Need an Elder Law Attorney?
Elder law refers to a practice that is devoted to the needs of older clients. Elder law attorneys have specialized knowledge about long-term care planning, advance health care directives, powers of attorney, probate and trusts, guardianships, and asset protection. While many elder law clients turn to an attorney in the midst of an elder care planning crisis, you might also reach out to an attorney with experience in this field so that you can plan ahead. For More Details https://lawesq.net/blog/2015/03/why-would-i-need-an-elder-law-attorney/

Power of Attorney Planning – Get the Fast Facts
One of the most important parts of your lifetime estate planning has to do with a power of attorney. This document gives one or more individuals the authority to act on your behalf as your official “agent”. You can give this individual narrow power or you can give them broad discretion over acting in your capacity. For More Details https://lawesq.net/blog/2015/03/power-of-attorney-planning-get-the-fast-facts/

Visit us at www.LawEsq.net

Call us to request a copy of the Newsletter: 732-521-9455

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The Four Ways to Pay For Long Term Care

With increasing longevity and awareness surrounding elder care issues, more people are seeking out options to plan for long-term care. In the event that you or a loved one needs long term care assistance, there are four primary ways for which that case can be paid for: shutterstock_213995581

  • Self-pay. This involves the spending of personal assets to cover rehabilitation, nursing home, or at-home care. In many places, the annual cost of care is exorbitant, forcing an individual to spend through his or her assets in a few months to a year.
  • Medicare. There are a lot of misconceptions about what Medicare will and won’t cover, but you should know that Medicare only provides for short-term rehab and not long-term care or custodial care.
  • Long-term care insurance. This kind of protection cannot be purchased after you or a loved one has developed a need for care. In order for the purchase to be affordable and for the policy to be approved, you’ll need to purchase it when you’re healthy and in advance of any long-term care events.
  • Medicaid. This is the only government program that covers long-term care, but you must need rigid income and asset guidelines in order to receive benefits. An elder law attorney can help you understand what you need to know in order to qualify for Medicaid.

To learn more, contact us at info@lawesq.net today.

Self-Settled Asset Protection Trusts: A Growing Estate Planning Trend?

Self-settled asset protection trusts get more buzz these days, but they weren’t even recognized in the United States until the latter part of the 1990s. Before this time, putting together a self-settled trust required establishment outside U.S. borders. In 1997, though, Alaska recognized self-settled trusts and Delaware followed. shutterstock_224194507

Currently, self-settled trusts are not a nationwide trend as only fifteen states recognize them. These include Alaska, Delaware, Hawaii, Mississippi, Missouri, Nevada, New Hampshire, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Virginia, and Wyoming.

Put together appropriately, a self-settled trust allows someone to transfer their assets inside while safeguarding this property from creditor access. More often than not, the state laws governing these trusts require that such a trust be irrevocable, that some of the trust assets be located in the state, and that a minimum of one trustee be a state resident or a corporation that maintains ability to operation within the state.

Be aware that as the self-settled trust grows, case law is still interpreting the statutes behind these trusts. To learn more about the evolution of asset protection planning and how to use trusts to your advantage in an estate plan, contact us today at info@lawesq.net.

Asset Protection Trusts: Guidelines for Efficient Integration

One of the most popular approaches to estate planning has to do with safeguarding assets against possible losses. Asset protection trusts are one common way to protect property for you and your beneficiaries. shutterstock_120265729

Asset protection trusts refer to irrevocable trust structures in which a trustee holds property and distributes it out under his or her discretion. The trust protects the assets from being exposed to risk through divorce, a beneficiary’s creditors, or other predators in the future. There are two primary categories for asset protection trusts: third party trusts and self-settled trusts. As the name suggests, a third party trust involves a trust being set up by one party to benefit another whereas a self-settled trust is established by one party for his or her own benefit.

Passing on assets to children or grandchildren these days could potentially be risky in such uncertain times, what with bankruptcies, lawsuits, and divorces all possible. Asset protection trusts can also guard against another common client concern: that a beneficiary will blow through all the money too quickly. In cases where a beneficiary develops a disability later in life, without proper planning this beneficiary may have to spend a large sum to support the needed care while also being disqualified for medical benefits.

These situations call for third-party trusts such as:

  • Trusts for the benefit of adult beneficiaries- This is ideal for those who are not good or comfortable with managing money, those who may get divorced in the future, or those who have an addiction problem.
  • Trusts for the benefit of minors- Since minors can’t legally accept an inheritance, this can be a way to provide assets in the future.
  • Trusts for the benefit of disabled individuals- A large inheritance could disqualify someone from government benefits while forcing them to spend through the assets they receive.
  • Trusts for surviving spouses- This is a popular option if you are concerned that your spouse will remarry or will be unable to manage the inheritance properly.

Consider the flexibility offered in these kinds of trusts and contact our office today for more information. Send us a message at info@lawesq.net

 

Gift Tax Returns and Penalties for Not Filing

A fair amount of taxpayers are familiar with at least the basics behind gifts and taxes, but it’s important to understand your obligations when making taxable gifts to others to ensure your compliance with the Internal Revenue Code.

If you make a taxable gift to someone else, a gift tax return needs to be filed. If you fail to do this, penalties may apply. If you don’t file the gift tax return as you should, you could be responsible for the amount of gift tax due as well as 5% of the amount of that gift for every month that the return is past due. If you fail to pay the penalty, you could be responsible for the amount of the gift tax due and .5% of the amount of the gift for every month after the due date. shutterstock_163036214

Sending in your gift tax return is important for practitioners, too. Failing to do this could result in criminal charges or even referral to the IRS Office of Professional Responsibility under the umbrella of a Circular 230 violation. Bear in mind that although this filing requirement does relate to taxable gifts, even those under the annual exclusion amount, should be listed on a report. Those who fall under the annual exclusion, however, are unlikely to face a penalty as these penalties only relate to the amount of tax due.

If you’ve got more questions about your obligations for reporting with regard to gifts, contact our office to learn more about the process and how gifting can impact your overall tax situation. You can set up a meeting by emailing info@lawesq.net.

Power of Attorney Planning – Get the Fast Facts

One of the most important parts of your lifetime estate planning has to do with a power of attorney. This document gives one or more individuals the authority to act on your behalf as your official “agent”. You can give this individual narrow powershutterstock_45049690s or you can give them broad discretion over acting in your capacity.

If you wanted to limit their powers, for example, you could stipulate that this person only has the authority to act to help close the sale of your home. This power, too, can be temporary or permanent, based on your needs. Many people choose to have the power of attorney be “triggered” by a certain type of event, such as your incapacity. This is referred to as a springing power of attorney.

Choosing the right person to serve as your agent is an important process, especially if you are electing powers with broad latitude permanently. You should consult directly with an estate planning lawyer to learn more about how the power of attorney will impact your life and what powers you should include within this document.

You should carefully weigh your options when putting together a new power of attorney. Getting advice from an outsider can help you avoid costly mistakes and have the peace of mind that you have made the right decision. Call us today to discuss your power of attorney or schedule an appointment over email at info@lawesq.net.

Why Would I Need an Elder Law Attorney?

Elder law refers to a practice that is devoted to the needs of older clients. Elder law attorneys have specialized knowledge about long-term care planning, advance health care directives, powers of attorney, probate and trusts, guardianships, and asset protection. While many elder law clients turn to an attorney in the midst of an elder care planning crisis, you might also reach out to an attorney with experience in this field so that you can plan ahead. shutterstock_183409916

There are many reasons that you might need an elder law attorney. If you or a loved one has concerns over the cost of long-term care and how you will be able to pay for it, then it’s pertinent that you speak to an elder law attorney as soon as possible. Your attorney can walk you through the various options to pay for long-term care, including any government programs for which you or your loved one may be eligible.

An elder law attorney can be crucial for helping you learn about qualifying for these programs and walking you through your options to ensure that your wishes are carried out in the manner that you intend.

These are just a handful of the ways that an elder law attorney can help you. Whether you’re in a crisis situation or looking ahead to plan for the future, contact an elder law attorney to get the information you need to make these important decisions. Reach out to us today at info@lawesq.net.

What Happens if I Die Without a Will?

If you die without a will, the laws of the state in which you lived will determine what happens to the assets inside your estate. Typically, the distribution will be passed along to your spouse and any children, although this can vary based on your location. One of the downsides of not having a will is that you give up control over what can happen to your estate assets. shutterstock_228663082

The state’s plan for the management of your estate is simply their best guess about what most people would elect to do with their estates. There are some built-in protections for special beneficiaries, like children. Unfortunately, there is no guarantee that what they choose to do will actually reflect your wishes. Outside of a family setting where everyone is in agreement, this kind of planning done by the court can be frustrating and confusing for heirs.

Putting a will in place is one of the most basic aspects of estate planning and gives you the opportunity to “override” your state’s default management plan for your estate. You can have control over more decisions and provisions that will impact the future for your heirs. To learn more about wills and other strategies in estate planning, contact us at info@lawesq.net

Revocable Living Trusts – What You Must Know

Before determining that a revocable living trust is the right fit for you, you should evaluate several factors. The term “living trust” may be exchanged with “revocable trust”. This means that you create it during your lifetime and that you can change it during your lifetime as well. The living trust, when used properly, can help you manage assets or protect you in the event that you become ill or disabled. Since you have the power to revoke or change them, you should be aware that the tax advantages available with irrevocable living trusts are not the same in this scenario. These trusts, however, can help you avoid probate. shutterstock_135839123

The use of irrevocable living trusts, however, does allow asset protection and other tax advantages because you do not have the power to revoke or change the trust.

 More than likely, you’ll be the trustee of the revocable trust while you are still alive, and those powers will transfer to another trustee in the event of your death. This second trustee might either distribute the property or continue managing the property for the beneficiaries. A living trust can allow for distribution of your property at death, and serves as a will substitute. However, unlike a will, a living trust gives you the power to manage property while you are still alive and gives a trustee power to manage it in the event you become incapacitated. To learn more about the different types of trusts, please contact us at info@lawesq.net.

Divorce+Trusts? Insulating Assets from Lawsuits; 5 Key Steps for Physicians; Estate Administration

Hear Neel Shah, Managing Attorney of the Law Firm of Shah & Associates, P.C. describe the highlights of this weekly Blog Posts. For the full post, visit: https://lawesq.net/blog/

Should Divorce Planning Be Included in Trusts?
Trust planning can be complex, which is why it should always be handled by an experienced estate lawyer. Depending on the type of trust you choose, there are many benefits you can reap from choosing this kind of tool. More and more, however, individuals are considering putting verbiage inside their trusts to have a spouse removed in the event of a divorce..For More Detailshttps://lawesq.net/blog/2015/03/should……uded-in-trusts/

Insulating Your Assets Against Lawsuits: Getting Started
Lance Armstrong has done it- insulated his assets from being totally exposed to creditors. But there are reasons that other people outside of public figures should considering doing the same. While it’s very difficult to imagine all of your money being entirely protected from creditors, there are steps you can take to protect yourself with business planning and estate planning. For more detailshttps://lawesq.net/blog/2015/03/insula……etting-started/

Five Key Steps For Physicians to Reduce Estate Taxes and Protect Heirs
These days, physicians have a lot to worry about as they grow their assets. Many, after years of residency, are plunged into a higher income bracket, but this can come with risks. Litigation, for example, can expose all those new assets of a physician to serious risk. That’s why it’s so important to take steps early to protect your assets and engage in regular review as your wealth grows. For More Detailshttps://lawesq.net/blog/2015/03/five-k……-protect-heirs/

What Are the Steps Involved in Administering an Estate?
It’s important to recognize that after a loved one passes away, no more estate planning can be done, even if you believe that the current plan is flawed. If you’re a party to administering the estate, you have to get to work pretty quickly to accomplish the tasks likely in front of you. For More Detailshttps://lawesq.net/blog/2015/03/why-pe……state-planning/

Often Forgotten: Tangible Personal Property in Estate Planning
Most people would consider these items, also referenced as “belongings” to be important or of sentimental value, but they often get overlooked in the estate planning process. These items can be furniture, clothing, jewelry, silverware, cars, boats, pieces of art, or household furnishings. Even those these items tend to be left out of estate planning, it’s also quite common for heirs to fight over them.https://lawesq.net/blog/2015/03/often-……state-planning/

Visit us at www.LawEsq.net

Call us to request a copy of the Newsletter: 732-521-9455

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Structuring Your Business Succession Plan With Taxes In Mind

If you feel overwhelmed or confused by the process of business succession planning, you’re not alone. In fact, this is a common challenge facing many of America’s business owners. To further complicate matters, many business owners are not informed about the possible tax implications of a succession plan they choose. This is why it’s so important to choose a business succession advisor who is familiar with the implications for both your business and your tax situation. shutterstock_223513792

One common mistake made in the process of business succession planning is to sell all or a portion of the stock to your children. This can have negative tax consequences that you didn’t realize when you put the plan into place. For example, if you use a stock purchase agreement or a stock redemption agreement that required insurance on the owner’s life in order to provide company stock to someone else, the IRS could collect estate taxes on that amount if you don’t structure everything with details in mind. While life insurance can be an important part of your overall estate planning, it might not be the most appropriate vehicle to pass on company stock to your children. A trust or other business succession planning strategy may be more aligned with your business needs while also taking into account the tax implications of such an action.

The bottom line is that you need a business succession planning advisor who is familiar with creating a comprehensive strategy aligned to your needs. Contact us today to learn more at info@lawesq.net.

Often Forgotten: Tangible Personal Property in Estate Planning

Most people would consider these items, also referenced as “belongings” to be important or of sentimental value, but they often get overlooked in the estate planning process. These items can be furniture, clothing, jewelry, silverware, cars, boats, pieces of art, or household furnishings. Even those these items tend to be left out of estate planning, it’s also quite common for heirs to fight over them. shutterstock_93998875

The cost of these items in comparison with the legal costs to fight over them is often not equal, meaning that heirs might be filling to fight for it but at great expense. Each family member might have a different perception on what is “fair” regarding the distribution of this property, so it pays to plan in advance and limit fighting between loved ones.

One common approach if you don’t want to list everything in detail is to put a standard provision inside that you leave everything to your spouse. If your spouse does not survive you, you can outline that your children receive it and that if your children do not agree, a personal representative can help distribute the property. Most people assume that their children will actually not argue over these items, but legal disputes related to these belongings are more common than you think.

In order to limit the possibility for such arguments, consider the following checklist:

  • Consider who should be included in the process
  • Detail the process of selection
  • Think about how gifts should be treated
  • Evaluate how separate appraisals of the same item should be treated
  • Determine how items with only sentimental value will be classified
  • Set up systems to allow for the home to be vacated as quickly as possible

To learn more about the importance of planning ahead for personal property, contact us today at info@lawesq.net.

What Are the Steps Involved in Administering an Estate?

It’s important to recognize that after a loved one passes away, no more estate planning can be done, even if you believe that the current plan is flawed. If you’re a party to administering the estate, you have to get to work pretty quickly to accomplish the tasks likely in front of you. shutterstock_165580142Depending on your location, you may need to follow a series of steps to actually administer the estate:

  • Filing the appropriate paperwork regarding probate
  • Initiate the probate process, which is ruled by state laws and court supervision
  • Get approval for estate expenses, if necessary
  • Publish a death or custodianship notice in the newspaper
  • Inventory the assets inside the estate, including their value
  • Notify any businesses or creditors
  • Collect any accounts receivable related to business agreements or personal loans
  • Claim proceeds for life insurance or annuities that were not payable by contract to specified beneficiaries
  • Putting together, paying, and representing the estate in front of tax authorities
  • Transfer property to the distributors

As you can see, there are many different tasks that might be required in estate administration, which is why more and more people are using trusts and other non-probate tools to plan for the future without making heirs worry about the process of probate. To get help putting your estate in order, contact us today at info@lawesq.net.

Five Key Steps For Physicians to Reduce Estate Taxes and Protect Heirs

These days, physicians have a lot to worry about as they grow their assets. Many, after years of residency, are plunged into a higher income bracket, but this can come with risks. Litigation, for example, can expose all those new assets of a physician to serious risk. That’s why it’s so important to take steps early to protect your assets and engage in regular review as your wealth grows.

shutterstock_95239396 (1)

There are a few basic steps you can take to safeguard yourself, but there are many options when it comes to asset protection planning as well as your estate. As your situation changes, of course, it’s important to reconsider what you

Step 1: Update Your Will

Step 2: Avoid Probate With Trusts and Other Tools

Step 3: Consider Tax Reduction Strategies like gifting or an ILIT

Step 4: Review Beneficiaries

Step 5: Update Regularly

The first three steps are something you can visit while meeting with an estate planning attorney. The last two highlight the importance of an annual review to ensure that your documents are still in line with your wishes. Following these five steps can be really important to protect the new wealth you are growing into. Don’t let your hard-earned assets be exposed to major risks- investigate what you can do to protect it today.  Email us at info@lawesq.net.

Insulating Your Assets Against Lawsuits: Getting Started

Lance Armstrong has done it- insulated his assets from being totally exposed to creditors. But there are reasons that other people outside of public figures should considering doing the same. While it’s very difficult to imagine all of your money being entirely protected from creditors, there are steps you can take to protect yourself with business planning and estate planning. shutterstock_258583025

One of the approaches to doing this is setting up “hurdles” for creditors. While technically this allows the creditors to still gain access to your assets, the structure of the hurdle is such that they will be unable to do so without having to “pay to play.” For some creditors, it’s simply too expensive to tear through your careful planning. Many opt to settle instead.

Anyone at risk of being sued should consider asset protection planning, because all it takes is one lawsuit to expose your home and a few cars to major risk. Step one in this process is ensuring that the proper insurance policies are in place, particularly those that limit liability. This kind of critical umbrella coverage is essential for safeguarding against the high costs of even just one lawsuit from a car accident or similar incident.

A second layer can be done using trusts that help to shield assets. Money for heirs is placed inside the trusts to protect those assets, but trusts can also be good tools for protecting children from the fallout of a divorce settlement or a lawsuit. Make sure you’ve taken an all-encompassing approach to your asset protection planning. Contact us today to get started or review your existing plan at info@lawesq.net.

Should Divorce Planning Be Included in Trusts?

Trust planning can be complex, which is why it should always be handled by an experienced estate lawyer. Depending on the type of trust you choose, there are many benefits you can reap from choosing this kind of tool. More and more, however, individuals are considering putting verbiage inside their trusts to have a spouse removed in the event of a divorce. Like most aspects of putting together such critical documents, there are pros and cons to this approach.

While safeguarding a trust by including such a provision might work out in the long run, not every divorce tears the couple apart entirely. Sometimes the couples part ways but are able to remain close for the purposes of raising children or even managing a family business. Some partners are divorced and then decide to remarry after a period of time. shutterstock_85892581

While the basic concept of planning ahead to protect assets is a good one in general, it’s hard to predict the future in the event that you do get divorced. There’s no telling what kind of emotions might be on the table at that time. In some cases, leaving the trust assets up for negotiation at the time of divorce can allow the parties to make better decisions for certain assets, like business interests.

There are three ways that you can plan ahead without restricting yourself too much in terms of a trust:

  • Aim for flexibility alongside precision to ensure that both parties have options in a divorce
  • Language that protects what the majority of divorce settlors would hope for
  • Seek an attorney who understands that he or she may have duties to both spouses at the trust drafting stage

To learn more about setting up a trust for success, contact us today at info@lawesq.net.